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AIR PASSENGER MARKET ANALYSIS DECEMBER 2014 KEY POINTS
Global air travel expanded by a strong 5.9% in 2014 compared to 2013, above its 10-year average growth rate of
5.6%. Economic conditions around the world showed considerable variation throughout 2014, but the demand
backdrop for air travel was supportive, particularly in emerging markets.
More than half of the growth in passenger travel took place on airlines in emerging markets, including Asia Pacific
and the Middle East. Total revenue passenger kilometers (RPKs) expanded 7.1% and 12.6%, respectively, for
2014 overall. Middle Eastern carriers benefitted from solid trade growth which supported expansion in business-
related international air travel. Asia Pacific carriers have seen strong growth in domestic air travel demand,
particularly in China toward the end of 2014.
During more recent months, much of the growth in total RPKs was driven by strong demand on domestic
markets. This owed mainly to a pick-up in domestic Chinese travel, a market in which annual growth reached 11%
in 2014, in spite of increasing signs of a moderation in the economy’s rate of expansion.
Although international RPKs grew by 6.1% in 2014 compared to 2013, the growth rate is slightly below its long-run
average (6.3%). Moreover, other than the spike in volumes in December compared to November (which is likely a
result of volatility in volumes), the level of traffic has broadly tracked sideways since August. The biggest
downward influences over this period have been from African and Asian carriers, whereas notable offsets have
come from Middle Eastern and European carriers, despite the latter region’s ongoing economic frailties. Although
the Eurozone has fallen back toward very weak economic expansion, partly as a result of the Russia-Ukraine
crisis, carriers in some nations, including Turkey, continue to expand strongly.
Industry load factors reached 79.7% overall in 2014, supported by stronger growth in demand than expansion in
capacity. Nonetheless, international load factors have displayed a downward trend throughout 2014, particularly
as a result of solid capacity expansion in Asia Pacific carriers.
The decline in oil prices over recent months should help support economic activity and passenger demand in the
months to come. However, the gradual easing in business confidence over the final third of 2014 has weighed on
international travel, and may constrain the pace of expansion in the near term.
Air Passenger Market Analysis December 2014
Year on Year Comparison Month on Month Comparison
Dec 2014 vs. Dec 2013 2014 vs. 2013 Dec 2014 vs. Nov 2014
RPK ASK PLF RPK ASK PLF RPK ASK PLFpt
International 6.3% 6.5% 78.3% 6.1% 6.4% 79.2% 1.6% 1.0% 0.5%
Domestic 5.8% 5.8% 79.4% 5.4% 4.3% 80.6% 1.1% 1.3% -0.2%
Total Market 6.1% 6.2% 78.7% 5.9% 5.6% 79.7% 1.4% 1.1% 0.2%
FTK: Freight-Tonne-Kilometers; AFTK: Available Freight Tonne Kilometers; FLF: Freight Load Factor. All Figures are expressed in % change Year on Year except FLF which are the load factors for the specific month.
Data are seasonally adjusted. All figures are expressed in % change MoM except, FLFpt which are the percentage point difference between LF of two months.
PASSENGER MARKET
International Markets
International RPKs grew by 6.1% in 2014 compared to 2013, which is slightly down on the 10-year growth rate of
6.3%. Performance overall has been robust, but there was an important trend development in the second half of
2014. Other than the spike in volumes in December compared to November (which is likely a result of volatility in
volumes), the level of traffic has broadly tracked sideways since August.
The main downward influences over the past few months have come from Asia Pacific and African carriers.
International traffic growth for Asia Pacific carriers reached 5.8% in 2014 overall but the seasonally-adjusted level
of traffic has been broadly flat over the past four months or so. This has come amid signs of a slowdown in
regional production activity, although trade volumes have remained strong.
International RPK growth for African carriers was weakest among all regions, with volumes expanding only 0.9%
in 2014 compared to 2013. The direct effects of the Ebola outbreak are judged to be small, with the impact largely
restricted to Guinea, Liberia and Sierra Leone (markets that comprise a very small proportion of overall African
traffic). Instead, the recent weakness appears to reflect adverse economic developments in parts of the continent,
not least in its largest economy, Nigeria, which is highly reliant on oil revenues. Earlier in the year, economic
activity and demand for air travel was hampered by weakness in another major regional economy, South Africa.
Conditions improved slightly later in 2014, but not by enough to boost international air travel.
Solid performance in other regions provided a positive offset to the downward pressures mentioned above.
International RPKs by Middle Eastern carriers expanded 13% in 2014 – the strongest gain across all the regions.
The region’s economies are comparatively well-placed to withstand the plunge in oil revenues and its airlines
continue to gain market share. Markit’s measures of business activity in non-oil sectors continue to show
improvement and point to strong growth. European airlines recorded a solid 5.7% increase in international traffic
in 2014, with robust travel on low cost carriers as well as on airlines registered in Turkey helping shrug off its
ongoing economic weakness and risks.
North American airlines experienced slower growth of 3.1% in international RPKs in 2014 overall. Nonetheless,
the US economy remains a stand-out performer among developed economies, and recent gains in trade volumes
bode well for business-related travel.
Annual growth in Latin American carriers’ RPKs was 5.8% in 2014. While growth in the Brazilian economy has
stagnated, regional trade volumes have continued to improve in recent months. Favorable base effects should
also support annual growth rates for the region’s carriers during the first quarter of 2015.
Industry load factors reached 79.2% overall in 2014, supported by stronger growth in demand than expansion in
capacity. Nonetheless, international load factors have displayed a downward trend throughout 2014, particularly
as a result of solid capacity expansion in Asia Pacific carriers.
Air Passenger Market Analysis December 2014
Domestic Market
With weakness in international air travel volumes during the latter parts of 2014, the upward trend in global travel
was driven almost entirely by domestic traffic. Strong growth in the Chinese domestic market was one of the key
contributors, with expansion reaching 11% in 2014 overall. This comes in spite of ongoing signs of a slowdown in
the Chinese economy and industrial activity, although consumer surveys and retail sales data remain robust.
The US domestic market also trended up in the latter months of 2014, coinciding with a pick-up in consumer
confidence and rising employment activity. That said, given that wage growth remains subdued, and the US air
travel market is very mature, the prospects for strong growth in air travel demand remain limited. The market
expanded 2.4% in 2014 overall.
Following the economic recession in the first half of the year, the trend in domestic air travel in Brazil also picked
up towards the end of the year. Growth in 2014 overall reached 6.9%. Nonetheless, growth in the economy is
stagnant and persistently-high inflation remains a concern. As a result, the upward trend for travel is not expected
to accelerate notably in the near term. On a positive note, capacity discipline has helped load factors reach the
highest levels among major domestic markets. Capacity expansion was kept to 2.0% in 2014, well below growth
in demand, pushing load factors to 80.0%.
Demand in the Indian domestic market improved in the latter parts of 2014 partly owing to market stimulation by
local carriers, with growth of 8.0% for the year overall.
Annual growth in Russian domestic RPKs reached 9.8% in 2014 compared to 2013. However, with favorable
base effects set to drop out of the annual comparison over the coming months, and the economy on the brink of
recession, annual RPK growth rates are likely to fall back sharply in Q1 2015.
Domestic air travel in Japan was weak throughout the middle of the year following April’s sales tax increase and
the subsequent recession. Nonetheless, the economy appeared to have stabilized in Q4 and seasonally-adjusted
domestic air volumes showed some increase in the final months of 2014. The mixed fortunes of the Japanese
economy supported moderate growth in domestic air travel in 2014, with expansion of 3.6%.
Annual growth in domestic air travel in Australia slowed to just 1.8% in 2014 overall. In fact, volumes have been
tracking sideways since the middle of 2013 as the economy has struggled to rebalance away from mining
investment-led growth. With consumer confidence at a three-year low, the near-term outlook remains subdued.
Air Passenger Market Analysis December 2014
Total Market (Domestic + International)
Air Passenger Market Analysis December 2014
ANNEX
Year on Year Comparison
Dec 2014 vs Dec 2013 2014 vs. 2013
RPK ASK PLF RPK ASK PLF
Africa -0.7% -0.8% 69.1% 0.9% 3.0% 67.5%
Asia/Pacific 7.8% 6.8% 78.0% 5.8% 7.0% 76.9%
Europe 4.4% 4.4% 78.7% 5.7% 5.2% 81.6%
Latin America 4.2% 4.7% 79.3% 5.8% 4.7% 80.0%
Middle East 14.4% 15.1% 77.4% 13.0% 11.9% 78.1%
North America 2.2% 4.7% 81.3% 3.1% 4.6% 81.7%
International 6.3% 6.5% 78.3% 6.1% 6.4% 79.2%
Australia 0.2% -1.0% 76.6% 1.8% 1.4% 76.5%
Brazil 11.4% 9.7% 80.9% 6.9% 2.0% 80.0%
China P.R. 13.9% 12.3% 77.3% 11.0% 11.1% 80.2%
India 12.5% 0.4% 84.7% 8.0% 5.7% 76.3%
Japan -0.6% -0.6% 62.2% 3.6% 0.6% 66.0%
Russian Federation 7.0% 7.3% 66.8% 9.8% 8.0% 75.3%
US 1.7% 3.6% 83.7% 2.4% 1.1% 84.8%
Domestic 5.8% 5.8% 79.4% 5.4% 4.3% 80.6%
Africa -1.1% -1.0% 69.6% 0.3% 2.5% 68.4%
Asia/Pacific 8.9% 7.4% 77.4% 7.1% 7.5% 77.2%
Europe 4.5% 4.3% 77.6% 5.8% 5.2% 80.8%
Latin America 6.9% 6.8% 79.7% 6.4% 4.1% 79.8%
Middle East 13.9% 14.6% 77.7% 12.6% 11.5% 78.4%
North America 1.9% 4.0% 82.8% 2.7% 2.4% 83.6%
Total Market 6.1% 6.2% 78.7% 5.9% 5.6% 79.7% RPK: Revenue-Passenger-Kilometers; ASK: Available-Seat-Kilometers; PLF: Passenger-Load-Factor; All Figures are expressed in % change Year on Year except PLFwhich are the load factors for the specific month.
Air Passenger Market Analysis December 2014
Month on Month Comparison
Dec 2014 vs. Nov 2014 Market Share
RPK ASK PLFpt RPK
Africa 1.8% 2.5% -0.5% 2.3%
Asia/Pacific 3.8% 1.7% 1.5% 29.7%
Europe 0.4% 0.2% 0.2% 33.4%
Latin America 0.4% -0.4% 0.7% 4.8%
Middle East 2.1% 1.9% 0.2% 15.2%
North America 0.7% 0.8% -0.1% 13.7%
International 1.6% 1.0% 0.5% 100.0%
Australia 0.1% 0.7% -0.5% 3.2%
Brazil 2.9% 3.7% -0.6% 4.7%
China P.R. 0.4% 1.4% -0.9% 21.5%
India 0.5% 0.4% 0.0% 3.2%
Japan -1.5% -0.8% -0.4% 3.2%
Russian Federation -0.7% 0.5% -0.9% 3.1%
US 1.3% 1.4% 0.0% 42.9%
Domestic 1.1% 1.3% -0.2%
Africa 1.4% 2.3% 0.4% 2.3%
Asia/Pacific 1.4% 1.9% 1.5% 32.8%
Europe 1.1% 0.5% -0.5% 23.7%
Latin America 1.3% 0.0% 1.0% 6.0%
Middle East 1.3% 1.2% 1.2% 10.0%
North America -3.4% 1.3% 1.6% 25.2%
Total Market 1.4% 1.1% 0.2% 100% Data are seasonally adjusted. All figures are expressed in % change MoM except, FLFpt which are the percentage point difference between load factors of two months.
IATA Economics
E-Mail: [email protected]
5TH
February 2015
FURTHER ANALYSIS AND DATA
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traffic-statistics.aspx
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